83590 Federal Register / Vol. 88, No. 229 / Thursday, November 30, 2023 / Notices 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 98585 

(September 28, 2023), 88 FR 68692 (October 4, 

2023) (‘‘Notice’’). 

4 15 U.S.C. 78s(b)(3)(A). A proposed rule change 

may take effect upon filing with the Commission if 

it is designated by the exchange as ‘‘establishing or 

changing a due, fee, or other charge imposed by the 

self-regulatory organization on any person, whether 

or not the person is a member of the self-regulatory 

organization.’’ 15 U.S.C. 78s(b)(3)(A)(ii). 

5See Notice, supra note 3. 

6 15 U.S.C. 78s(b)(3)(C). 

7See Notice, supra note 3, at 68692. 

8 Id. 

the Medicare medical insurance (Part B) 

program and paying the premiums for 

their insurance coverage. Generally, 

these individuals are categorically 

needy under Medicaid and meet the 

eligibility requirements for Medicare 

Part B. States can also include in their 

buy-in agreements, individuals who are 

eligible for medical assistance only. The 

RRB uses Form RL–380–F, Report to 

State Medicaid Office, to obtain 

information needed to determine if 

certain railroad beneficiaries are entitled 

to receive Supplementary Medical 

Insurance program coverage under a 

state buy-in agreement in states in 

which they reside. Completion of Form 

RL–380–F is voluntary. One response is 

received from each respondent. 

Previous Requests for Comments: The 

RRB has already published the initial 

60-day notice (88 FR 66068 on 

September 26, 2023) required by 44 

U.S.C. 3506(c)(2). That request elicited 

no comments. 

Information Collection Request (ICR) 

Title: Report of Medicaid State Office 

on Beneficiary’s Buy-In Status. 

OMB Control Number: 3220–0185. 

Forms submitted: RL–380–F. 

Type of request: Revision of a 

currently approved collection. 

Affected public: State, local, and 

Tribal governments. 

Abstract: Under the Railroad 

Retirement Act, the Railroad Retirement 

Board administers the Medicare 

program for persons covered by the 

railroad retirement system. The 

collection obtains the information 

needed to determine if certain railroad 

beneficiaries are entitled to receive 

Supplemental Medical Insurance 

program coverage under a state buy-in 

agreement in states in which they 

reside. 

Changes proposed: The RRB proposes 

the following changes to Form RL–380– 

F: 

• Change ‘Medicare Number’ box on 

righthand side of form to ‘Medicare 

Beneficiary Identifier’. 

• Remove box 6 on righthand side of 

form ‘Social Security Number’ as it is a 

duplicate of box 4 ‘Beneficiary’s Own 

Social Security Number’. 

• In Question 4, change ‘Medicare 

number under which state paid 

premium (if different from RRB 

Medicare claim number’ to ‘Medicare 

Beneficiary Identifier Number (MBI) in 

which state paid premium’. 

The burden estimate for the ICR is as 

follows: 

Form No. Annual 

responses 

Time 

(minutes) 

Burden 

(hours) 

RL–380–F .................................................................................................................. 600 10 100 

Additional Information or Comments: 

Copies of the forms and supporting 

documents can be obtained from 

Kennisha Money at (312) 469–2591 or 

Kennisha.Money@rrb.gov. Comments 

regarding the information collection 

should be addressed to Brian Foster, 

Railroad Retirement Board, 844 North 

Rush Street, Chicago, Illinois 60611– 

1275 or Brian.Foster@rrb.gov. 

Written comments and 

recommendations for the proposed 

information collection should be sent 

within 30 days of publication of this 

notice to www.reginfo.gov/public/do/ 

PRAMain. Find this particular 

information collection by selecting 

‘‘Currently under 30-day Review—Open 

for Public Comments’’ or by using the 

search function. 

Brian Foster, 

Clearance Officer. 

[FR Doc. 2023–26332 Filed 11–29–23; 8:45 am] 

BILLING CODE 7905–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99017; File No. SR–MEMX– 

2023–25] 

Self-Regulatory Organizations; MEMX 

LLC; Suspension of and Order 

Instituting Proceedings To Determine 

Whether To Approve or Disapprove a 

Proposed Rule Change To Amend Its 

Fee Schedule To Establish an Options 

Regulatory Fee 

November 24, 2023. 

I. Introduction 

On September 27, 2023, MEMX LLC 

(‘‘MEMX’’ or the ‘‘Exchange’’) filed with 

the Securities and Exchange 

Commission (the ‘‘Commission’’), 

pursuant to section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a 

proposed rule change (file number SR– 

MEMX–2023–25) to adopt an Options 

Regulatory Fee (‘‘ORF’’).3 The proposed 

rule change was immediately effective 

upon filing with the Commission 

pursuant to section 19(b)(3)(A) of the 

Act.4 The proposed rule change was 

published for comment in the Federal 

Register on October 4, 2023.5

Pursuant to section 19(b)(3)(C) of the 

Act,6 the Commission is hereby: (1) 

temporarily suspending file number SR– 

MEMX–2023–25; and (2) instituting 

proceedings to determine whether to 

approve or disapprove file number SR– 

MEMX–2023–25. 

II. Description of the Proposed Rule 

Change 

The Exchange proposes to establish 

an ORF in the amount of $0.0015 per 

contract side.7 The per-contract ORF 

will be collected by the Options 

Clearing Corporation (‘‘OCC’’) on behalf 

of the Exchange for each options 

transaction, cleared or ultimately 

cleared by an Exchange member in the 

‘‘customer’’ range, regardless of the 

exchange on which the transaction 

occurs. The ORF is collected from 

either: (1) a Member that was the 

ultimate clearing firm for the 

transaction; or (2) a non-Member that 

was the ultimate clearing firm where a 

Member was the executing clearing firm 

for the transaction.8

According to the Exchange, the 

amount of the proposed ORF fee is 

‘‘based on historical industry volume, 

projected volumes on the Exchange, and 


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9 Id. at 68693. 

10 Id. 

11 Id. 

12 Id. at 68692 and 68695. 

13 Id. at 68695. 

14 Id. 

15 15 U.S.C. 78s(b)(3)(C). 

16 15 U.S.C. 78s(b)(1). 

17See 17 CFR 240.19b–4 (Item 3 entitled ‘‘SelfRegulatory Organization’s Statement of the Purpose 

of, and Statutory Basis for, the Proposed Rule 

Change’’). 

18 Id. 

19 15 U.S.C. 78f(b)(4). 

20 15 U.S.C. 78f(b)(5). 

21 15 U.S.C. 78f(b)(8). 

22See Notice, supra note 3, at 68695–96. Several 

other exchanges have a lower ORF rate than that 

proposed by the Exchange. See, e.g., Nasdaq ISE, 

available at https://listingcenter.nasdaq.com/ 

rulebook/ise/rules/ISE%20Options%207 ($0.0013); 

Nasdaq GEMX, available at Rules | Nasdaq GEMX 

($0.0012); CboeEDGX, available at Cboe EDGX 

Options Exchange Fee Schedule ($0.0001); and 

MIAX Emerald, available at https://

www.miaxglobal.com/sites/default/files/fee_

schedule-files/MIAX_Emerald_Fee_Schedule_

10122023_3.pdf ($0.0006). 

23See Notice, supra note 3, at 68696. 

24 Id. 

25 Id. 

26 Id. at 68693 and 68696. 

27 Id. The Exchange also states that its proposed 

collection method which is similar to that utilized 

by other options exchanges ‘‘was originally 

instituted for the benefit of clearing firms that 

desired to have the ORF be collected from the 

clearing firm that ultimately clears the transaction.’’ 

Id. at 68696. 

28 Id. at 68697. 

projected Exchange regulatory costs.’’ 9

The Exchange states that ‘‘revenue 

generated from ORF, when combined 

with all of the Exchange’s other 

regulatory fees and fines, will cover a 

material portion, but not all, of the 

Exchange’s regulatory costs.’’ 10 The 

Exchange notes that it will monitor the 

amount of ORF revenue it collects ‘‘to 

ensure that it, in combination with its 

other regulatory fees and fines, does not 

exceed the Exchange’s total regulatory 

costs.’’ 11

The Exchange proposes that the ORF 

will automatically sunset on September 

30, 2024, approximately one year after 

the operative date.12 The Exchange 

believes this will allow it time to 

‘‘gather the necessary data, including its 

actual regulatory costs and revenues, as 

well as the cost of regulating executions 

that clear in a customer capacity and 

executions that occur on away markets, 

while also allowing it to adequately 

cover a portion of the projected costs 

associated with the regulation of its 

Members.’’ 13 According to the 

Exchange, allowing the collection of 

ORF from the outset of its operations on 

September 27, 2023 until September 30, 

2023, when the fee will automatically 

sunset, will allow the Exchange to fund 

its regulatory program and collect 

evidence to provide to the Commission 

and inform its approach to ORF after the 

sunset period.14

III. Suspension of the Proposed Rule 

Change 

Pursuant to section 19(b)(3)(C) of the 

Act,15 at any time within 60 days of the 

date of filing of an immediately effective 

proposed rule change pursuant to 

section 19(b)(1) of the Act,16 the 

Commission summarily may 

temporarily suspend the change in the 

rules of a self-regulatory organization 

(‘‘SRO’’) if it appears to the Commission 

that such action is necessary or 

appropriate in the public interest, for 

the protection of investors, or otherwise 

in furtherance of the purposes of the 

Act. As discussed below, the 

Commission believes a temporary 

suspension of the proposed rule change 

is necessary or appropriate in the public 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act to allow for 

additional analysis of the proposed rule 

change’s consistency with the Act and 

the rules thereunder. 

When exchanges file their proposed 

rule changes with the Commission, 

including fee filings like the Exchange’s 

present proposal, they are required to 

provide a statement supporting the 

proposal’s basis under the Act and the 

rules and regulations thereunder 

applicable to the exchange.17 The 

instructions to Form 19b–4, on which 

exchanges file their proposed rule 

changes, specify that such statement 

‘‘should be sufficiently detailed and 

specific to support a finding that the 

proposed rule change is consistent with 

[those] requirements’’ 18

Section 6 of the Act, including 

Sections 6(b)(4), (5), and (8), require the 

rules of an exchange to: (1) provide for 

the equitable allocation of reasonable 

fees among members, issuers, and other 

persons using the exchange’s 

facilities; 19 (2) perfect the mechanism of 

a free and open market and a national 

market system, protect investors and the 

public interest, and not be designed to 

permit unfair discrimination between 

customers, issuers, brokers, or 

dealers; 20 and (3) not impose any 

burden on competition not necessary or 

appropriate in furtherance of the 

purposes of the Act.21

In justifying its proposal, the 

Exchange stated that establishing an 

ORF in the amount of $0.0015 is 

reasonable because it ‘‘will serve to 

balance the Exchange’s regulatory 

revenue against the anticipated 

regulatory costs’’ and ‘‘is lower than the 

amount of ORF assessed on other 

exchanges.’’ 22 According to the 

Exchange, its ORF is designed to 

‘‘generate revenues that, when 

combined with all of the Exchange’s 

other regulatory fees, will be less than 

75% of the Exchange’s regulatory 

costs. . . .’’ 23

The Exchange also asserted that the 

ORF is equitably allocated and not 

unfairly discriminatory because ‘‘it is 

charged to all Members on all their 

transactions that clear as customer at the 

OCC’’ and is ‘‘directly based on the 

amount of customer options business 

they conduct.’’ 24 In addition, the 

Exchange stated that ‘‘[r]egulating 

customer trading activity is much more 

labor intensive and requires greater 

expenditure of human and technical 

resources than regulating non-customer 

trading activity, which tends to be more 

automated and less labor-intensive.’’ 25

Further, the Exchange stated that it has 

‘‘broad regulatory responsibilities with 

respect to a Members’ activities, 

irrespective of where their transactions 

take place’’ and notes that it ‘‘will not 

be able to effectively surveil [its 

Members’] conduct without looking at 

and evaluating activity across all 

options markets.’’ 26 Consequently, the 

Exchange imposes the ORF on all 

customer-range transactions cleared by a 

Member, even if the transactions do not 

take place on the Exchange and 

regardless of whether the transaction 

was executed by a member.27

Furthermore, the Exchange notes that 

implementing the proposed ORF with a 

sunset date of approximately one year 

after the operative date is reasonable 

because ‘‘it will give the Exchange 

adequate time to collect and analyze 

pertinent data while ensuring the 

Exchange, as a new entrant into equity 

options trading, is able to adequately 

fund its regulatory program to the same 

extent as its competitors.’’ 28

In temporarily suspending the 

Exchange’s proposed rule change, the 

Commission intends to further consider 

whether the proposal to establish an 

ORF in the amount of $0.0015 is 

consistent with the statutory 

requirements applicable to a national 

securities exchange under the Act. In 

particular, the Commission will 

consider whether the proposed rule 

change satisfies the standards under the 

Act and the rules thereunder requiring, 

among other things, that an exchange’s 

rules provide for the equitable 

allocation of reasonable fees among 

members, issuers, and other persons 

using its facilities; not permit unfair 

discrimination between customers, 

issuers, brokers or dealers; and do not 


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29See 15 U.S.C. 78f(b)(4), (5), and (8), 

respectively. 30For purposes of temporarily suspending the 

proposed rule change, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 31 15 U.S.C. 78s(b)(3)(C). Once the Commission 

temporarily suspends a proposed rule change, 

section 19(b)(3)(C) of the Act requires that the 

Commission institute proceedings under section 

19(b)(2)(B) to determine whether a proposed rule 

change should be approved or disapproved. 

32 15 U.S.C. 78s(b)(2)(B). 

33 15 U.S.C. 78s(b)(2)(B). Section 19(b)(2)(B) of the 

Act also provides that proceedings to determine 

whether to disapprove a proposed rule change must 

be concluded within 180 days of the date of 

publication of notice of the filing of the proposed 

rule change. See id. The time for conclusion of the 

proceedings may be extended for up to 60 days if 

the Commission finds good cause for such 

extension and publishes its reasons for so finding, 

or if the exchange consents to the longer period. See 

id. 

34 15 U.S.C. 78f(b)(4). 

35 15 U.S.C. 78f(b)(5). 

36 15 U.S.C. 78f(b)(8). 

37See Notice, supra note 3, at 68692. 

38 Id. at 68693. 

39See Notice, supra note 3, at 68693. 

40 17 CFR 201.700(b)(3). 

41See id. 

42See id. 

impose any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act.29

Therefore, the Commission finds that 

it is necessary or appropriate in the 

public interest, for the protection of 

investors, and otherwise in furtherance 

of the purposes of the Act, to 

temporarily suspend the proposed rule 

change.30

IV. Proceedings To Determine Whether 

To Approve or Disapprove the 

Proposed Rule Change 

In addition to temporarily suspending 

the proposal, the Commission also 

hereby institutes proceedings pursuant 

to sections 19(b)(3)(C) 31 and 19(b)(2)(B) 

of the Act 32 to determine whether the 

Exchange’s proposed rule change 

should be approved or disapproved. 

Institution of proceedings does not 

indicate that the Commission has 

reached any conclusions with respect to 

any of the issues involved. Rather, the 

Commission seeks and encourages 

interested persons to provide additional 

comment on the proposed rule change 

to inform the Commission’s analysis of 

whether to approve or disapprove the 

proposed rule change. 

Pursuant to section 19(b)(2)(B) of the 

Act,33 the Commission is providing 

notice of the grounds for possible 

disapproval under consideration: 

• Whether the Exchange has 

demonstrated how its proposed fee is 

consistent with section 6(b)(4) of the 

Act, which requires that the rules of a 

national securities exchange ‘‘provide 

for the equitable allocation of 

reasonable dues, fees, and other charges 

among its members and issuers and 

other persons using its facilities’’ 34

(emphasis added); 

• Whether the Exchange has 

demonstrated how its proposed fee is 

consistent with section 6(b)(5) of the 

Act, which requires, among other 

things, that the rules of a national 

securities exchange not be ‘‘designed to 

permit unfair discrimination between 

customers, issuers, brokers, or 

dealers’’ 35 (emphasis added); and 

• Whether the Exchange has 

demonstrated how its proposed fee is 

consistent with section 6(b)(8) of the 

Act, which requires that the rules of a 

national securities exchange ‘‘not 

impose any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of [the Act].’’ 36

As noted above, the Exchange 

proposes to establish an ORF in the 

amount of $0.0015 per contract side 

‘‘based on historical industry volume, 

projected volumes on the Exchange, and 

projected Exchange regulatory costs.’’ 37

The Exchange also states that ‘‘revenue 

generated from ORF, when combined 

with all of the Exchange’s other 

regulatory fees and fines, will cover a 

material portion, but not all, of the 

Exchange’s regulatory costs.38 However, 

those and other statements in support of 

its proposed establishment of an ORF 

are general in nature and lack sufficient 

detail and specificity. 

For example, the Exchange does not 

elaborate on the ‘‘material portion’’ of 

options regulatory expenses that it seeks 

to recover from the ORF and why the 

threshold it selected (i.e., that ORF will 

‘‘not exceed more than 75% of total 

annual regulatory costs’’) correlates to 

the degree of regulatory responsibility 

and expenses borne by the Exchange as 

it relates to the regulation of customer 

options transactions.39 Further, the 

Exchange has not provided any 

quantifiable information to support its 

assertion that regulating customer 

trading activity is ‘‘much more laborintensive’’ and therefore, more costly. 

The Exchange does not claim in its 

filing that its regulation of customer 

activity will consume 75% of total 

regulatory costs nor does it assert that 

customer activity will require a level of 

effort that will occupy 75% of the 

regulatory department’s attention. 

Further, the Exchange does not 

sufficiently analyze how funding 75% 

of its total regulatory costs (including 

direct and indirect expenses) from ORF 

constitutes an equitable allocation of 

reasonable fees among members, and it 

does not provide sufficient detail to 

allow the Commission and commenters 

to consider those issues. 

Further, the Exchange has not 

provided specific or detailed 

information regarding the anticipated 

regulatory cost associated with 

regulating, monitoring, and surveilling 

on-exchange activity compared to 

activity that takes place on other 

exchanges (which exchanges assess 

their own ORF on those trades). In 

particular, the Exchange proposes to 

collect ORF on executions that do not 

occur on the Exchange. The proposed 

ORF rate is the same for on-exchange 

and off-exchange activity, so the 

proposal will result in the Exchange at 

least initially funding a very significant 

portion of its total regulatory costs from 

a fee charged on contracts that execute 

away from the Exchange. The Exchange 

does not provide a sufficiently detailed 

analysis or present specific facts to 

show the level of regulatory effort and 

regulatory costs it would expend on 

contracts that execute on other 

exchanges. Without more information in 

the filing on the Exchange’s projected 

regulatory revenues, regulatory costs, 

and regulatory activities to supervise 

and regulate members, specifically, e.g., 

customer versus non-customer activity 

and on-exchange versus off-exchange 

activity, the proposal lacks specific 

information that can speak to whether 

the proposed ORF is reasonable, 

equitably allocated, and not unfairly 

discriminatory, particularly given that 

the ORF is assessed only on transactions 

that clear in the ‘‘customer’’ range and 

regardless of the exchange on which the 

transaction occurs. 

Under the Commission’s Rules of 

Practice, the ‘‘burden to demonstrate 

that a proposed rule change is 

consistent with the [Act] and the rules 

and regulations issued thereunder . . . 

is on the [SRO] that proposed the rule 

change.’’ 40 The description of a 

proposed rule change, its purpose and 

operation, its effect, and a legal analysis 

of its consistency with applicable 

requirements must all be sufficiently 

detailed and specific to support an 

affirmative Commission finding,41 and 

any failure of an SRO to provide this 

information may result in the 

Commission not having a sufficient 

basis to make an affirmative finding that 

a proposed rule change is consistent 

with the Act and the applicable rules 

and regulations.42

As explained above, the Exchange’s 

statements in support of the proposed 

rule change are general in nature and 


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43See Susquehanna Int’l Grp., LLP v. SEC, 866 

F.3d 442, 447 (August 8, 2017). 

44See id. 

45See Notice, supra note 3. 

46See Notice, supra note 3, at 68693. 

47 Id. 

48See id. 

49 Id. at 68696. 

50 Id. 

51 Id. 

52See id. at 68694. 

53See id. 

lack detail and specificity. The 

Commission cannot unquestionably rely 

on an exchange’s statements and 

representations.43 Instead, the 

Commission needs sufficient 

information to support independent 

findings that a proposal is consistent 

with the requirements of the Act.44

Here, such an analysis includes, among 

other things, whether the proposed ORF 

is an equitable allocation of reasonable 

dues, fees, and other changes among the 

Exchange’s members, as well as whether 

the proposed ORF is equitable and not 

unfairly discriminatory. 

The Commission needs additional 

information from the Exchange to 

demonstrate how the proposal meets 

those and other applicable requirements 

of the Act, to assess whether the 

Exchange has established a sufficient 

nexus between the proposed ORF and 

the Exchange’s regulation of customer 

trading activity both on and off 

exchange. While the Commission 

broadly solicits comment from all 

interested parties on the proposal, the 

Commission believes that the Exchange 

alone has access to much of the specific 

detail necessary to fully address these 

questions and concerns because these 

matters involve qualitative and 

quantitative information about the 

Exchange’s operations. Specifically, 

among other things, the Commission 

asks that commenters address the 

sufficiency of the Exchange’s statements 

in support of the proposal contained in 

the Notice.45 In particular, the 

Commission seeks comment on the 

following aspects of the proposal and 

asks commenters to submit data where 

appropriate to support their views: 

1. Information on the Exchange’s 

Projected Regulatory Costs and 

Revenues. The Exchange states that its 

proposed ORF rate is reasonable based 

on historical industry volume, projected 

volumes on the Exchange, and projected 

Exchange regulatory costs. The 

Exchange notes that its regulatory costs 

would include direct regulatory 

expenses and certain indirect expenses 

for work ‘‘allocated in support of the 

regulatory function.’’ 46 According to the 

Exchange, indirect regulatory expenses 

(including, among other things, human 

resources, legal, information technology, 

facilities and accounting, as well as 

certain shared expenses necessary to 

operate the Exchange and carry out its 

regulatory function) are anticipated to 

be approximately 24% of the Exchange’s 

total regulatory costs for 2023 and 2024 

and direct regulatory expenses are 

anticipated to be approximately 76% of 

the Exchange’s total regulatory costs for 

2023 and 2024.47 Do commenters 

believe the Exchange has provided 

adequate detail regarding these metrics? 

If not, what additional information 

should be provided to demonstrate how 

the proposal is consistent with the Act? 

2. Information on the Exchange’s 

Imposition of ORF on Customer Orders. 

The Exchange states that it will ensure 

that revenue generated from ORF not 

exceed more than 75% of total annual 

regulatory costs.48 Do commenters 

believe that the Exchange has 

sufficiently analyzed and justified its 

proposal to fund 75% of its total 

regulatory expenses from a fee imposed 

only on options transactions clearing in 

the customer-range, where those 

expenses include the regulation of 

transactions that clear in the noncustomer-range (e.g., broker-dealer and 

market maker trades)? In addition, 

explaining that the proposed ORF 

would be charged to ‘‘all Members on 

all their transactions that clear as 

customer at the OCC,’’ the Exchange 

states that such methodology ‘‘ensures 

fairness by assessing fees to those 

Members that are directly based on the 

amount of customer options business 

they conduct.’’ 49 The Exchange further 

asserts that ‘‘[r]egulating customer 

trading activity is much more labor 

intensive and requires greater 

expenditure of human and technical 

resources than regulating non-customer 

trading activity, which tends to be more 

automated and less labor-intensive.’’ 50

According to the Exchange, ‘‘the costs 

associated with administering the 

customer component of the Exchange’s 

overall regulatory program are 

materially higher than the costs 

associated with administering the noncustomer component (e.g., Member 

proprietary transactions) of its 

regulatory program.’’ 51 Do commenters 

believe that the Exchange has provided 

sufficiently detailed quantitative and 

qualitative evidence in support of this 

aspect of its proposal? Specifically, 

examples of information that would be 

helpful to demonstrate how the 

assessment of ORF only on orders that 

clear in the customer-range correlates to 

the level of effort and costs the 

Exchange expends to regulate customer 

options transactions include: (a) the 

percentage of volume expected to clear 

in the customer-range both on and off 

the Exchange compared to the 

percentage of volume expected to clear 

in a range other than customer both on 

and off the Exchange; (b) the percentage 

of the Exchange’s regulatory budget that 

would be attributable to the regulation 

of orders that are expected to clear in 

the customer-range compared to the 

percentage of the Exchange’s regulatory 

budget that would be attributable to 

orders that are expected to clear in a 

range other than customer; (c) the 

anticipated percentage of the Exchange’s 

regulatory level of effort that would be 

attributable to the regulation of orders 

that are expected to clear in the 

customer-range compared to the 

anticipated percentage of the Exchange’s 

regulatory level effort that would be 

attributable to orders that are expected 

to clear in a range other than customer; 

and (d) the proportion of the Exchange’s 

revenues, as reported in the most recent 

annual financials it submitted on 

Form1, that would be represented by 

expected ORF revenues if those 

revenues had been included in the most 

recent annual financials. 

3. Information on the Exchange’s 

Assessment of ORF on Away-Market 

Activity. The Exchange states that it has 

‘‘broad regulatory responsibilities with 

respect a Member’s activities, 

irrespective of where their transactions 

take place. . . .’’ 52 The Exchange 

therefore believes that it is appropriate 

to impose the ORF even where the 

transaction does not take place on the 

Exchange.53 Do commenters believe that 

the Exchange has provided sufficiently 

detailed quantitative and qualitative 

evidence in support of how the 

assessment of ORF on away-market 

transactions correlates to the effort it 

will expend on regulating away-market 

transactions compared to the level of 

effort the Exchange will invest in 

regulating transactions on Exchange? 

Specifically, examples of information 

that would be helpful to assess the 

application of the ORF to executions 

that do not occur on the Exchange 

include: (a) the projected percentage of 

the Exchange’s overall regulatory budget 

that is expected to be attributable to 

regulating away-market transactions 

compared to the projected percentage of 

the Exchange’s overall regulatory budget 

that is expected to be attributable to 

regulating on-Exchange transactions; (b) 

the projected percentage of the 

Exchange’s regulatory level of effort that 

is expected to be attributable to the 

regulation of away-market transactions 

compared to the projected percentage of 


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54See id. at 68692. 

55See 15 U.S.C. 78f(b)(4), (5), and (8). 

56 15 U.S.C. 78s(b)(2). Section 19(b)(2) of the Act 

grants the Commission flexibility to determine what 

type of proceeding—either oral or notice and 

opportunity for written comments—is appropriate 

for consideration of a particular proposal by an 

SRO. See Securities Acts Amendments of 1975, 

Report of the Senate Committee on Banking, 

Housing and Urban Affairs to Accompany S. 249, 

S. Rep. No. 75, 94th Cong., 1st Sess. 30 (1975). 

57 15 U.S.C. 78s(b)(3)(C). 

58 17 CFR 200.30–3(a)(57) and (58). 

the Exchange’s regulatory level of effort 

that is expected to be attributable to the 

regulation of orders that execute on the 

Exchange; (c) the anticipated percentage 

of ORF revenue that is expected to be 

derived from away-market transactions 

compared to the anticipated percentage 

of ORF revenue that is expected to be 

derived from executions on the 

Exchange; and (d) more detail on the 

regulatory activities the exchange 

expects to perform for trades that do not 

occur on the Exchange. 

4. Information on the Exchange’s 

Regulatory Program Concerning 

Clearing Brokers. The Exchange states 

that ORF is collected on ‘‘customer 

range’’ options transactions cleared or 

ultimately cleared by an Exchange 

member regardless of the exchange on 

which the transaction occurs.54 The 

Exchange also will collect ORF from a 

non-Member clearing broker where a 

member was the executing firm and a 

non-Member was the ultimate clearing 

firm. Do commenters believe that the 

Exchange has provided sufficiently 

detailed quantitative and qualitative 

evidence in support of this aspect of its 

proposal? Specifically, examples of 

information that would be helpful to 

provide context for the collection of 

ORF from member and non-member 

clearing brokers and determine whether 

a sufficient nexus exists between the 

ORF and the Exchange’s regulation of 

clearing activity, include: (a) the 

percentage of the Exchange’s regulatory 

expenses and level of regulatory activity 

that is expected to pertain to clearance 

and settlement activity and the 

percentage this is expected to account 

for with respect to the Exchange’s 

overall regulatory costs and regulatory 

activity, and if that differs depending on 

whether the ultimate clearing firm is an 

Exchange member or not and whether 

the contract executes on the Exchange 

or not; (b) the number of ‘‘ultimate 

clearing firms’’ that are Exchange 

members compared to the number of 

‘‘ultimate clearing firms’’ that are nonMembers from which ORF is expected 

to be collected on behalf of the 

Exchange; and (c) the percentage of ORF 

revenues that is expected to be collected 

from Member clearing firms compared 

to the percentage of ORF revenue that is 

expected to be collected from nonMember clearing firms. 

The Commission is instituting 

proceedings to allow for additional 

consideration and comment on the 

issues raised herein, including as to 

whether the proposed fees are 

consistent with the Act, and 

specifically, with the requirements that 

exchange fees be reasonable, equitably 

allocated, and not unfairly 

discriminatory.55

V. Commission’s Solicitation of 

Comments 

The Commission requests written 

views, data, and arguments with respect 

to the concerns identified above as well 

as any other relevant concerns. Such 

comments should be submitted by 

December 21, 2023. Rebuttal comments 

should be submitted by January 4, 2024. 

Although there do not appear to be any 

issues relevant to approval or 

disapproval which would be facilitated 

by an oral presentation of views, data, 

and arguments, the Commission will 

consider, pursuant to Rule 19b–4, any 

request for an opportunity to make an 

oral presentation.56

The Commission asks that 

commenters address the sufficiency and 

merit of the Exchange’s statements in 

support of the proposal, in addition to 

any other comments they may wish to 

submit about the proposed rule change. 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

MEMX–2023–25 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to file 

number SR–MEMX–2023–25. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (https://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–MEMX–2023–25 and should be 

submitted on or before December 21, 

2023. Rebuttal comments should be 

submitted by January 4, 2024. 

VI. Conclusion 

It is therefore ordered, pursuant to 

section 19(b)(3)(C) of the Act,57 that file 

number SR–MEMX–2023–25, be and 

hereby is, temporarily suspended. In 

addition, the Commission is instituting 

proceedings to determine whether the 

proposed rule change should be 

approved or disapproved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.58

Christina Z. Milnor, 

Assistant Secretary. 

[FR Doc. 2023–26263 Filed 11–29–23; 8:45 am] 

BILLING CODE 8011–01–P 

SMALL BUSINESS ADMINISTRATION 

[Disaster Declaration #20114 and #20115; 

California Disaster Number CA–20002] 

Presidential Declaration of a Major 

Disaster for Public Assistance Only for 

the State of California 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Notice. 

SUMMARY: This is a Notice of the 

Presidential declaration of a major 

disaster for Public Assistance Only for 

the State of California (FEMA–4750– 

DR), dated 11/21/2023. 


khammond on DSKJM1Z7X2PROD with NOTICES